Daohe Global Group Limited entered into a memorandum of understanding to acquire Loovee Holdings Inc from a group of sellers for HKD 1 billion.
January 18, 2017
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Daohe Global Group Limited (SEHK:915) entered into a memorandum of understanding to acquire Loovee Holdings Inc from a group of sellers for approximately HKD 800 million on January 19, 2017. The consideration is subject to further negotiation between the parties. Daohe Global Group has agreed to pay a deposit of HKD 20 million to the bank account or the escrow agent on or before January 27, 2017. If the formal agreement is not entered into on or before March 31, 2017, the memorandum of understanding shall be terminated. As of February 21, 2017, Daohe Global Group Limited entered into an agreement to acquire Loovee Holdings Inc from a consortium of sellers for HKD 1 billion. Under the transaction, Daohe Global Group will acquire 16,000 shares, representing 100% stake in Loovee Holdings. As consideration, Daohe Global Group Limited deposited an amount of HKD 20 million to the sellers on January 20, 2017, will pay the balance of HKD 80 million through internal resources and /or borrowings and will issue 150 million shares. Out of the balance of HKD 80 million, the buyer will pay HKD 40 million on completion and HKD 40 million within 90 days after the completion. Under the agreement, any outstanding shareholder loans as at December 31, 2016 shall be capitalized as additional paid-in capital of Loovee Holdings Inc and Daohe Global Group Limited shall repay within 90 days after the completion to the sellers any shareholder loans. The amount of shareholders' loan should not exceed HKD 10 million. For the year ended December 31, 2016, Loovee Holdings reported revenue of CNY 85.5 million (HKD 96.4 million) and loss after tax of CNY 10.9 million (HKD 12.4 million).
The transaction is subject to governmental and regulatory approvals, approval by Daohe Global Group's shareholders and Board, listing of consideration shares on the stock exchange, sellers providing with the unaudited consolidated financial statements of Loovee Holdings, due diligence review, third party approvals and others. The long stop date for conditions fulfillment is April 25, 2017. As on April 19, 2017, Daohe Global Group Limited and the sellers extended the long stop date to May 31, 2017 or such later date as the parties may agree. As of April 28, 2017, the Board of Directors of Daohe Global Group Limited recommended the shareholders to vote in favor of the transaction. The shareholders' meeting of Daohe Global Group Limited is scheduled for May 23, 2017. The transaction is expected to close within 10 days after the date on which all the conditions are fulfilled.
PricewaterhouseCoopers Hong Kong served as an accountant to Loovee Science & Technology Development Co., Ltd. and Ernst & Young Hong Kong served as an accountant to Daohe Global Group Limited.
Daohe Global Group Limited is a Hong Kong-based investment holding company principally engaged in the sales of garments, accessories and household products. The Company operates through two segments. Sales of Merchandise segment is engaged in the design, purchasing and sales of garments, fashion accessories, hard goods and labels. Its hard goods include bathroom products, furniture, garden decoration, glassware, kitchen appliances, lighting products, stationary products, toys, sporting goods and luggage, among others. Provision of Services segment is engaged in the provision of procurement services and value-added services related to procurement agency businesses. The Company operates businesses in North America, Europe, Asia and Australia, among others.
DAOHE GLOBAL GROUP LIMITED 
